Chapter 6 Flashcards
General Agent
A general agent has the authority to bind the principal in the on-going conduct of a particular business. Real estate salespeople are examples of general agents when representing their broker. Property managers are good examples too
Obedience
An agent must obey the principal’s instructions unless asked to do something unethical, illegal or unreasonable.
Loyalty
The key obligation an agent owes to the principal is absolute loyalty.
Reimbursement
In most real estate contracts, the principal is not obligated for the broker’s marketing expenses unless there is an agreement to do that effect.
Termination of the Agency Agreement
Performance - property sold
Expiration - time ran out
Revocation - principal terminated
Renunciation - agent terminated
Abandonment - agent made no effort so principal terminated
Agreement - mutual agreement
Death
Incapacity - bankruptcy or legally incompetent
Supervening Illegality - laws changed
Extinction - destruction of the property like a fire
Honesty and Integrity
An agent must always provide accurate factual information free from fraud or misrepresentation
Puffing
A statement of exaggeration that a reasonable person would recognize as untrue is not misrepresentation
GA Stigmatized Property Law
When the buyer is the client, a licensee would owe absolute allegiance and should disclose any revelant fact including the information at the property is psychologically impacted.
Broker’s Responsibility
The salesperson has fiduciary responsibilities to the broker and to the broker’s client and can sign contracts on the broker’s behalf only with written authorization
The Listing
The listing is the broker’s contract of employment with an owner authorizing the broker to find a buyer or tenant who is “ready, willing and able” to meet the owners terms. In general this means that the broker has earned the commission ONLY if the buyer is found who offers the asking price, is willing to pay and can afford to pay on a specified terms.
Net Listing
A net listing results when a seller has a certain sum in mind that he or she wants to realize from the sale and authorizes the broker to market the property at any price in pocket of the difference.
Not allowed in Georgia.
Buyer Representation
When a licensee is working with a buyer and has not entered into an agency agreement, the buyer must be treated as a customer.
Representing the seller as agent or sub-agent. The seller is a client and the buyer is a customer.
Buyer Agency
When the buyer brokerage agreement is an open contract or an exclusive one, the buyer broker must be absolutely loyal to the buyers best interests. These factors should be considered when entering into this agreement.
The buyer broker must be careful and diligent in researching things such as zoning, school locations, availability of utilities, road widing plans, etc., and should not rely solely on information given by the owner or a listing agent. Their accountability for any problem the buyer might later raise is limited once the buyer has his or her own “expert.”
Working with a Customer
There are many things a salesperson can do for a seller or buyer, even when not in an agency relationship. A sales person can perform ministerial acts without creating an agency. These are acts which do not require judgment and do not amount to advising or counseling.
Just assisting with the basics.
Duties of Brokers Engaged by Sellers or Landlords
Promote the clients interest by Timely presenting all offers.
